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Ely
Ely, Counselor at Law
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can the clause "this guaranty will continue unchanged by any

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can the clause "this guaranty will continue unchanged by any bankruptcy" in a retail store lease be upheld?
Hello friend. My name is XXXXX XXXXX welcome to JustAnswer. Please note: (1) this is general information only, not legal advice, and, (2) there may be a slight delay between your follow ups and my replies.

I am sorry, but likely not. According to 11 U.S.C. §541(c), an interest of the debtor in property becomes "property of the estate," meaning that the debtor does not lose the property or contract right, despite a provision in an agreement.

What this essentially means is that a clause that states "this shall survive bankruptcy" is not not valid if a bankruptcy is filed, and shall not survive a bankruptcy.

Now, these clauses are often put in out of force of habit or with hope that the parties would believe that it would be valid, however, it is not, if a bankruptcy is filed.

If this is not what you had wanted to hear, I am sorry. Please note: I aim to give you genuine information and not necessarily to tell you only what you wish to hear. Please, rate me on the quality of my information and do not punish me for my honesty. I understand that hearing things less than optimal is not easy, and I empathize.

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